Venezuela: Bolivar receives update, Petro becomes the unit of account

In Venezuela, there will be two official currencies in the future. In addition to the inflated Bolivar, there will be a second official unit of account with the state crypto currency Petro.

Venezuela’s President Nicolás Maduro announced in a televised speech on 13th August that Venezuela’s future pay, salaries, goods and services should be paid in Venezuela, the Spanish newspaper ABC International reports.

“As of Monday [August 20], Venezuela will have a second billing unit based on the price, the value of the oil. It will be a second unit of account of the Republic and will be used as a compulsory unit of account of our oil industry PDVSA “,

it said in the speech on. Furthermore, Maduro announced a “new pricing system for goods and services anchored in oil. The new pricing system should bring a “substantial improvement in the income of the workers”.

In the course of the currency conversion, the Venezuelan central bank deletes five zeros from the national currency, the Bolivar. The new banknotes are also supplemented by the word Bolivar with the addition “soberano” (“sovereign”). The government and central bank took the step to counteract the hyperinflation of the Bolivar. According to estimates by the International Monetary Fund IMF, this should amount to one million percent by the end of this year.

Concrete figures Maduro has not yet mentioned in his televised speech. He leaves that to the Central Bank (El Banco Central, BCV):

“[The CBA] will begin to publish the official figures on the value of the sovereign Bolivar depending on the oil or the value of the oil in relation to the international currencies”,

With the currency conversion also speculation with the Bolivar should be stopped. In order to facilitate the entry into force of the currency conversion and the issue of banknotes, Maduro has declared next Monday a day off. For the time being, old and new banknotes will coexist. The old Bolivar notes are then gradually withdrawn from circulation.